Total talent management is one of the most debated topics in the marketplace today. Debate notwithstanding, the big question is what are some of the cost savings opportunities and risks associated with this workforce management strategy.
Some of the cost savings total talent management (TTM) has to offer range from leveraging known, vetted talent for new engagements to integrating enabling management technologies. Each of these opportunities requires some process change and technology support/investments to capture the benefit. To varying degrees, new risks might also emerge once a TTM initiative is implemented.
In this first of a two-part article, I’ll discuss two cost-saving opportunities stemming from the use of TTM, as well as associated risks.
Conversions. There is a great TTM initiative opportunity to bring savings to permanent hiring process. Midsize to large organizations, on average, are converting contingent workers (CW) to traditional, staff positions at annual rates of 20% to 30%, but even higher rates can be achieved. Depending on how much of the standard hiring process is executed for these “temp-to-perm” conversions, some solid permanent hiring savings is available. Staffing Industry Analysts’ RPO research discovered per-hire fees ranging from an average of $1,212 to $1,999. Anecdotally, we’ve heard general RPO market per hire fees can range from $750 to $8,000. Search firm fees and internal process hiring cost can be even higher. So eliminating sourcing costs and/or other process costs in a permanent hiring transaction with CW conversions can be very impactful.
Some risks involved in operationalizing and optimizing one’s conversion opportunity have to do with management of a contingent worker’s privacy, candidate publishing permission and candidate ownership. These risks are manageable, but in too many cases they might not be noticed and addressed until bad things happen. From an adoption risk perspective, some hiring managers hold a quality bias against CW talent, which might risk cost savings forecast in ROI plans because of dampened participation in the TTM conversion initiative. Additionally, conversion cost should include time and technology investments concerning improved engagement manager performance reviews and the database technology to capture and publish/internally market those talent performance profiles.
Another interesting risk is a failed conversion because the CW talent refuses the conversion hire offer. For some hard-to-find skill sets, such as IT, some organizations have made the initial CW engagement decision dependent on the worker’s pre-acceptance of a potential permanent hiring offer, if and when, one might occur.
Silver Medalists. While less pure cost savings than taking advantage of what you already paid for, TTM can help organizations leverage talent already identified as good, viable candidates. Whether one is targeting permanent hiring process candidates or even contingent workforce candidates, the hiring organization has invested sourcing and in some cases vetting/travel costs in processing candidates through the interview stage of a hiring decision process. Inevitably, viable candidates don’t get the job or the CW engagement, but are excellent, outstanding talent. Hence, they are sometimes known as “silver medalists.” So creating a follow-up process that directs silver medalists talent to other CW or permanent opportunities maximizes the sourcing and vetting investments already made with this vetted candidate.
The associated risks are similar to those mentioned in the conversion cost savings initiative with regard to management of the contingent worker’s privacy, candidate interest permission and candidate ownership. But also a change management risk also needs to be addressed with regard to the usefulness of the hiring managers’ written talent profile reviews. They will need to be better, more detailed and much more reliable to deliver the effectiveness available in a silver medalists initiative.
Finally, how one manages silver medalists sourced from the permanent hiring process will affect the amount of savings captured. This CW engagement process can alternatively include an MSP provider staff, a staffing partner or internal talent management resources.